FibroGen Inc (FGEN) 2015 Q4 法說會逐字稿

Welcome to the FibroGen Fourth Quarter and 2015 Yearend Financial Results. My name is Brandon, and I will be your operator for today.

(Operator Instructions)

Please note, this conference is being recorded. I will now turn it over to Jennifer Williams. Jennifer, you may begin.

Thank you. Good afternoon and thank you all for joining our call.

On this call, we expect to make forward-looking statements regarding our business, including our collaborations with AstraZeneca and Astellas, financial guidance, the initiation, enrollment, design, conduct and results of clinical trials, research and development activities, and certain other statements regarding the future of our business.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes that are difficult to predict, and many of which are outside of our control.

For risks and uncertainties regarding or business and statements made on the call today, as well as factors that may cause differences between current expectations and actual results, we refer you to our annual report on Form 10-K for the yearended December 31, 2015, filed with the Securities and Exchange Commission, copies of which can be found in the Investors section of our website.

We undertake no obligation to update any forward-looking statement whether as a result of new information, future developments, or otherwise. A webcast of this conference call will be available for replay on the Investor Relations page at FibroGen's website, www.FibroGen.com.

I will now hand the call over to Tom Neff, Chief Executive Officer of FibroGen.

Thank you, Jennifer. Good afternoon. On today's call, we will review key updates on our programs, discuss recent accomplishments, and highlight our most important near-term and long-term goals. Joining me for the discussion are Dr. Peony Yu, VP of Clinical Development; Dr. Frank Valone, Chief Medical Officer; and Pat Cotroneo, Chief Financial Officer.

Let me begin with comments on our progress in our Phase 3 anemia program with roxadustat. As we announced in our press release and 10-Q this afternoon, we continue to advance global studies using roxadustat to treat anemia in chronic kidney disease, or CKD patients, both on dialysis and those not on dialysis.

There are approximately 7,500 patients targeted for enrollment as part of the requirements to file for approval in the US and EU, and a total of seven studies we're conducting with Astellas, who is our partner in Japan, Europe and other former Soviet Republic territories and AstraZeneca, our partner in the US, China and rest of world.

In China, we commenced Phase 3 enrollments in December in dialysis and non-dialysis. Astellas is our licensee in Japan; Astellas has now reported completed all of the Phase 2 requirements and they have advised us that they intend to commence Phase 3 trials in mid-2016.

Overall, we remain on track to meet our timelines and continue to expect to file regulatory submissions for roxadustat in 2016 for China and 2018 for the US. Of the seven global Phase 3 studies for registration in the US, EU and other territories, FibroGen is conducting three. By agreement with our partners in January 2015, we have measured progress against the goal of reaching target enrollments by April, May of 2016 in each of these studies.

On our November call, we provided enrollment updates, stating that we had hit target enrollment for one of the three studies in September, October period, well ahead of schedule, and that we were on a combined basis at about 80% of our target enrollment at the time of the November call.

We can now tell you that we will achieve the target enrollment for the second of the three studies sometime this week, if not today, so February, March, again, earlier than goal. With respect to the third study, which is worldwide, we agreed with our US partner at yearend that we would deemphasize enrollments in two territories, Eastern Europe and Asia Pacific and focus on other territories including US and Latin America. As a result of that plan to focus on certain geographies, we now think that reaching our enrollment goal will happen in Q3.

Another way of looking at the agreed upon target enrollments is that our enrollment is now approximately 90% of the sum of the target patient numbers for our three studies. That is compared to 80% figure provided in mid-November. We are pleased overall with our progress to date.

With respect to our partners, their clinical teams are responsible for enrolling the other Phase 3 studies. At this point, we are not allowed to comment on their enrollment status. Together, the three companies have opened these studies very well, with considerably more than 1,000 participating study sites in over 50 countries around the world.

As it relates to safety updates, let me begin by reminding listeners that our data safety monitoring board has been in place since 2008 and the DSMB, according to its charter, meets regularly to review roxadustat clinical studies. In our November 2015 quarterly shareholder call, we announced that following the October 2015 DSMB meeting, we were instructed to continue Phase 3 studies according to the current protocol with no modifications.

In January of 2016, DSMB review again confirmed that the trial should proceed with current Phase 3 protocols, again a green light with no modification. The way this charter works, there are regular meetings, quarterly reviews, and they're diligent to several time resulted in us presenting requested data cuts and interim follow-up meetings off the quarterly cycle. As we see it, they are doing their job and we view it as a priority to share adherence to the DSMB charter.

Finally, with respect to publications, we're pleased to see in the last six months or so publication of several of our Phase 2 roxadustat clinical studies. During the past month, in February 2016, the American Journal of Kidney Disease published a manuscript including data from a Phase 2 study in dialysis patients demonstrating roxadustat's ability to correct anemia in patients who do not respond adequately to ESA therapy, such as those with high levels of inflammation.

Incident dialysis patients and patients with chronic inflammation are often hyper-responsive to ESAs, which necessitates the use of higher doses of ESAs to increase hemoglobin levels. This increases both safety risk and treatment costs.

In this particular study, we intentionally enrolled these treatment-resistant subjects; not only did roxadustat correct anemia in patients with inflammation, but also roxadustat dose requirements did not increase in proportion to higher levels of CRP in more inflammation patients. CRP is a commonly used marker of inflammation. Dr. Peony Yu will provide additional detail on our roxadustat global program later in this call.

We're also developing roxadustat in China. Subsequent to our last investor conference call, we initiated two Phase 3 clinical trials there. The dialysis study is 300 patients, with an ESA comparator at the current standard of care in China, with 2-to-1 randomization. The time point for efficacy and safety analysis is after 26 weeks of dosing. At present, we anticipate completing enrollment in the dialysis trial in May of this year.

The non-dialysis study is 150 patients placebo-controlled, also 2-to-1 randomization. The time point for efficacy and safety analysis is after 8 weeks of dosing. We currently plan to complete enrollment of the non-dialysis trial shortly after mid-year 2016.

We're also committed to provide a safety data for 100 Chinese subjects treated with roxadustat for one year. This requirement is consistent with ICH guidelines for drugs intended for chronic use. At the current rate of enrollment, and bearing in mind 2-to-1 randomization ratios, we anticipate that the 100 safety extension subjects needed will be randomized to roxadustat from these two trials before the end of March 2016. The final NDA package requires safety data for these subjects.

We anticipate having primary safety and efficacy data for both Phase 3 trails, 26 weeks and 8 weeks for dialysis and non-dialysis, respectively, in late 2016; and we plan to initiate the submission process based on this data by yearend.

With respect to the NDA, we expect that the Beijing CFDA will conduct the manufacturing review and site inspections first, to be followed by technical review of the chronicle filing by the Center for Drug Evaluation, or CDE, after submission of 52 weeks' safety assessment data.

As indicated on our last call in November, we reported that after discussions with our regulators in China, we intended to expand the use of roxadustat in other anemia indications. Specifically, we have agreed with AstraZeneca to pursue the development of roxadustat into myelodysplastic syndrome and into chemotherapy induced anemia.

I will now make some comments pertinent to these Chinese programs. AstraZeneca is contracted to launch and market roxadustat for MDS and CIA in China under our agreements in a manner similar to CKD. This is to say that they will provide the commercialization support for launch except medical affairs, which is our responsibility on an ongoing basis. Since the November Steering Committee, we have been encouraged to move forward with development expeditiously and we are getting excellent cooperation from various arms of AstraZeneca.

Our plan is to file a CTA for MDS in China in March of this year. Subsequent to this expected submission of the MDS CTA in China next month, we plan to move forward with CIA in China later this year. There are also US programs in the planning stages in MDS and CIA, and we expect to have more to report on that front later on this year.

Let me now turn to FG-3019 in fibrosis, our second major clinical program. We continue to make steady progress with FG-3019, a fully human antibody, generated using MedRX or BMS technology. FG-3019 blocks the biologic activity of connective tissue growth factor or CTGF, a glycoprotein proven to be the central mediator in fibrosis.

I'm going to touch briefly on our current studies in pancreatic cancer, pulmonary fibrosis and DMD. In pancreatic cancer, we presented interesting preliminary data at ASCO-GI last month. There is considerable interest in these results as they could represent a new paradigm and as we familiarize PIs and their review boards, we're adding more sites to this study as rapidly as possible.

In idiopathic pulmonary fibrosis, we're now aiming to complete the enrollment and Phase 2 placebo-controlled trial 3019 as first-line therapy in Q2 2016. We expect to be reporting data in the first half of 2017.

In addition, we're moving forward plans to expand this study to explore combination treatment with approved therapies for pirfenidone and nintedanib where we expect to enroll 60 more patients this year.

Duchenne muscular dystrophy, we have initiated a Phase 2 study of FG-3019. This is an open-label study for non-ambulatory patients. The first few patients were dosed last month and enrollment is ongoing. We're adding sites; we had two in December and we expect to open five or six more in the next 90 days. Dr. Frank Valone will provide more details regarding the 3019 program later in this call.

Regarding our corneal implant program, which is in China, in January 2016, we received designation from Chinese regulatory authorities, clarifying that FG-5200 will be treated as a Domestic Class III medical device. To meet the requirements for market approval, we've established a pilot-scale [GMPA cryptic] corneal implant fabrication facility at our anemia manufacturing site in Beijing in 2015. We have completed process technology transfer and expect to complete the registration campaign in the second half of 2016. Materials from this campaign in Beijing will be used in pre-clinical studies, which will commence is China in the second half of this year. We expect to file a CTA by Q4 2017 and commence the pivotal clinical trial thereafter.

Finally, I wish to mention a few items related to our financial position. First, with respect to cash, at the end of Q4, or December 31, 2015, we had $336.9 million in total cash. I note that we use the term total cash in this call to refer cash including restricted cash, cash equivalents, receivables and investments, which consists primarily of investment grade corporate debt of two to three years maturities or shorter.

Next, the most important news financially is that we have finished the period of 50:50 cost sharing with AstraZeneca as of November 2015. This largely eliminates our roxadustat cash burn outside of China. Additionally, for clarity, I need to point out that the new programs in China, in CIA and MDS, to the extent that the US portions are open, we'll not require any 50:50 spinning period, the exception being China itself where we continue 50:50 profit share joint venture with AZ.

Since then, AstraZeneca and Astellas have been contractually obligated to pay for FibroGen's development expenses for roxadustat. This has had the effect of eliminating our cash burn outside of China. During our last call, we went through a detailed example, which was accurately reported on the transcripts we've seen. To avoid spending a lot of time today on that example, we're simply going to refer everyone to the November call and if there is any confusion, please contact Pat Cotroneo or Michael Lowenstein, our Chief Corporate Counsel, or me and we can walk you through the example that we provided in November.

Non-contingent milestone under our current agreements in Q2 of 2016, we will receive another contractual non-contingent payment from AstraZeneca of $62 million. This will complete the $402 million of non-contingent license payments under the 2013 collaboration agreement.

Finally, before I turn this call over to our clinical leadership to review our clinical programs, I'd like to address one other financial question that is being asked by a number of investors in recent weeks. This relates to whether FibroGen is planning to do large amount of mandatory equity financing over the next few years.

The short answer here is no; we're not planning any serial equity offerings at all. But for avoidance of any misunderstanding, let me clarify where we are. What we said on our last investor call in November was that we expected to have at least $295 million to $300 million of cash at the end of 2016. To further clarify this statement, our fiscal year 2016 budget and 2017 forecast have been approved by our Board and do not contain any new financing. Therefore, assuming the anemia program is going forward as planned, but it does not assume any expansion of the 3019 program beyond Phase 2, we expect to have in excess of $300 million in total cash at the end of the 2016 year. Under these same assumptions, we currently expect to have in excess of $200 million in total cash at the end of the following year 2017.

To be crystal clear about the assumptions here, our partners Astellas and AstraZeneca are contractually obligated to cover development, launch and commercialization cost globally outside of China. And as we have previously disclosed, there are approximately $1.1 billion in development and regulatory milestones under our Astellas and AstraZeneca agreements, of which $425 million really to submission and approval to the CKD indications in the US and EU. The numbers computed above do not include any contingent milestone payments in the US, with respect to the AZ agreement or in the EU with the Astellas agreements covering the European subcontinent or rather former Soviet Republic.

I hope this clarification is clear enough. We think we have an acceptable financial position and plan given current market conditions, but we're being very cautious about any programs not on the critical path.

I will now turn this call over to our lead clinician, Dr. Peony Yu in the global anemia program, and Dr. Frank Valone in our fibrosis program. Pat Cotroneo will then review our financial results and we will conclude this session with a question-and-answer period.

Peony, would you like to take over?

Thank you, Tom. I'd like to comment briefly on roxadustat and its potential for treating patients with anemia. I will then provide an update regarding our global program.

Roxadustat is a small molecule inhibitor of hypoxia-inducible factor prolyl-hydroxylase activity in the development for treatment of anemia in patients with chronic kidney disease. We have studied roxadustat in more than 1,100 subjects in Phase 1 and 2 studies combined.

Our results have been consistent with a 90% or greater hemoglobin response rate at the selected doses across four Phase 2 anemia correction studies in CKP patients, including subjects on dialysis and not on dialysis.

As Tom mentioned, we are progressing well in our global Phase 3 program. Our Phase 3 program is powered to demonstrate cardiovascular safety using major adverse cardiac event, or MACE, as primary safety endpoint. MACE is being evaluated in two separate patients study pools, with 3,500 targeted in dialysis and 3,800 in non-dialysis.

In the non-dialysis Phase 3 studies, roxadustat has been compared to placebo. The regulatory requirement is to show roxadustat to be superior on efficacy in anemia correction and non-inferior on safety. In our Phase 3 dialysis studies, roxadustat is compared to epoetin alfa. While the regulatory requirement is to show non-inferiority for both efficacy and safety, our studies are powered to demonstrate superiority over ESA in dialysis patients. FibroGen, Astellas and AstraZeneca are conducting a total of seven Phase 3 studies for registration in the US, Europe and other territories.

As Tom stated, FibroGen is responsible for enrollment of three of the seven studies. We have completed target patient recruitment in one of the three studies, and a second will achieve this goal this week, both before April, May 2016 goal we agreed to with our partners. We expect to complete enrollment in the third study in the third quarter of 2016.

Overall, for the three studies, total enrollment is approximately 90% of the aggregate target enrollment agreed with our partners. The size of our safety and clinical database continue to expand, with higher patient numbers and longer treatment durations.

Roxadustat continues to be well tolerated. In fact, several subjects in our open-label extension study have received roxadustat for as long as 4.5 years, and continues to do well. We find that the pure effect of roxadustat durable in our current intermittent dosing regimen.

Furthermore, we continue to benefit from ongoing review by the DSMB overseeing roxadustat clinical studies. The committee has convened regularly since 2008 to review roxadustat safety data. Most recently, in January 2016, the DSMB review again confirmed that we should continue with current Phase 3 protocols without modification.

Our global program remains on schedule to submit regulatory filings in 2018 in the US and 2016 in China. We would also like to note that our partner, Astellas, has completed Phase 2 dialysis and non-dialysis studies in Japan and data reconciliation and analysis are in progress.

Finally, Tom mentioned a recent clinical publication, and I will touch on that briefly. In the American Journal of Kidney Disease manuscript relating to our Phase 2 data in dialysis patients, we show that roxadustat was effective in maintaining hemoglobin levels in a broad range of end-stage renal disease patients on dialysis, including patients with inflammation who were hypo-responsive to treatment with ESA.

This was achieved in the absence of intravenous iron. These encouraging results suggest that roxadustat can potentially overcome the treatment hurdle presented by inflammation in the context of ESA therapy.

I'll hand the call back to Tom now and will be happy to address questions at the conclusion of the call.

Thank you, Peony. I'll now ask Dr. Valone to make a few comments on the 3019 program. Frank?

Thank you, Tom. I'd like to review briefly our second major clinical program which relates to treatment of fibrotic diseases and fibrotic cancers. Our lead product candidate is FG-3019, a fully human monoclonal antibody that blocks biologic activity of CTGF, or Connective Tissue Growth Factor. CTGF has been shown to be central mediator of fibrosis and to contribute to tumor growth and metastasis. We have targeted four distinct areas of development for FG-3019; pancreatic cancer, idiopathic pulmonary fibrosis, or IPF, Duchenne muscular dystrophy, or DMD, and liver fibrosis.

Turning first to pancreatic cancer, we're running a trial in patients with unresectable locally advanced pancreatic tumors. These patients have a life expectancy similar to that of patients with metastatic cancer. Resection of the pancreatic tumors can add months, or even years, to a patient's life expectancy, but only 15% to 20% of patients are eligible for surgery.

The overall goal of our trial is to determine whether FG-3019 in combination with chemotherapy can convert inoperable cancer to operable or resectable cancer. Patients are eligible for the trial if they have been fully evaluated for tumor resection and scored as not being candidates for surgery. Subjects are then randomized 2-to-1 to FG-3019, combined with standard of care chemotherapy gemcitabine plus nab-paclitaxel, compared with chemotherapy regimen alone. Approximately 42 subjects are expected to be enrolled and the number maybe increased based on preliminary results.

Last month, we reported on the first eight evaluable subjects at the ASCO GI conference. Of the four subjects randomized to FG-3019 plus chemotherapy, one discontinued treatment due to a serious adverse event related to gemcitabine, and three were converted to operable cancer. In contrast, one of the first four subjects receiving chemotherapy alone was considered a candidate for surgery after treatment.

Our second area of clinical development is IPF. We completed a single-arm, open-label dose finding trial with FG-3019 in subjects with moderate to severe IPF. Results of our study show that 35% of subjects had stable or improved lung fibrosis after treatment with FG-3019 for 48 weeks.

To our knowledge, no IPF clinical trial has shown improved lung fibrosis as measured by HRCT. This includes trials of the recently approved drugs, pirfenidone and nintedanib. Study 067 is an ongoing Phase 2 randomized double-blind placebo-controlled study to evaluate the safety and efficacy of FG-3019 in IPF patients with mild to moderate disease defined as baseline FVC or forced vital capacity percent predicted between 55% and 90%.

As with our open-label Phase 2 trial, study 049, primary efficacy endpoint of study 067 is change in FVC from baseline. Secondary endpoints are pulmonary fibrosis, as measured by quantitative HRCT, other pulmonary function assessments and measures of health-related quality of life. This trial was initially placebo-only controlled study targeting 90 subjects. And as we previously stated, enrollment slowed down upon approvals for pirfenidone and nintedanib. However, we are currently over 2/3 enrolled for the requisite 90 subjects.

Enrollment has picked up in the last few months as we've attained regulatory clearance and site activation in Canada, South Africa, New Zealand, India and Australia. Romania and Bulgaria are expected soon and we're getting subjects in the United States once again. Also, we're expanding the 067 study to include 60 subjects, who will be treated with FG-3019, or placebo, in combination with therapies already approved for IPF.

Duchenne muscular dystrophy has been of interest to FibroGen for a number of years. DMD is characterized by extensive muscle fibrosis. Typically, you see aggressive muscle loss and weakness, which ultimately leads to pulmonary, or cardiac failure. Preclinical studies, including those in the MDX mouse model of DMD, suggest that CTGF contributes to the process by which muscle is replaced by fat and fibrosis.

In the same model, FG-3019 treatment was shown to improve muscle strength and exercise endurance. FG-3019 has the potential to treat all subjects with DMD, regardless of the underlying genetic defect, and is thus differentiated from most products currently under development, which targets subsets of DMD patients with specific genetic defects.

We have initiated our Phase 2 clinical study of non-ambulatory DMD patients. The open-label single-arm Phase 2 study will evaluate safety and efficacy of FG-3019 in up to 22 non-ambulatory DMD patients who are at least 12-years-old. Each patient will receive FG-3019 at a dose of 35 milligrams per kilogram every two weeks for up to two years. The primary endpoint is pulmonary function as measured by forced vital capacity, and key secondary endpoints include arm strength and function. We will also be evaluating the therapeutic potential of FG-3019 with respect to changes in our muscle fibrosis and cardiac fibrosis as assessed by MRI.

An interim analysis of safety and efficacy will be performed after all evaluable subjects have completed one year of dosing. We're also currently considering another trial design in endpoints for second clinical study in younger ambulatory DMD patients.

Finally, regarding liver fibrosis, we have had a longstanding interest in use of FG-3019 to treat liver fibrosis associated with cirrhosis and hepatitis in NASH patients. Recently, in Tokyo, at a meeting of the Asian Pacific Association for study of liver disease, we presented the results of a trial of FG-3019, plus entecavir versus entecavir plus placebo in subjects with liver fibrosis due to hepatitis B.

The results showed at TREND for dose response improvement in liver fibrosis at doses of FG-3019 similar to those now being tested in other diseases. We're encouraged by these results and we continue to evaluate options for trial of FG-3019 in subjects with advanced liver fibrosis due to NASH. In addition, we're evaluating the potential for trial of FG-3019 in subjects with advanced liver fibrosis due to hepatitis C, where it appears that the fibrosis may not result at the cure of hepatitis with current potent antiviral therapy.

With that, I'll turn this meeting back to Tom.

Thank you, Frank, for that. Pat Cotroneo will now review the financial highlights for the company. Pat?

Thank you, Tom. As we announced in our press release today, total revenue for the year-ended December 31, 2015, was $180.8 million. For the same period, operating expenses were $258.5 million and net loss was $85.8 million, or $1.42 per basic and diluted share.

Included in operating expenses for the year-ended December 31, 2015, was an aggregate non-cash portion totaling $36.3 million, of which $27.7 million was a result of stock-based compensation expense.

In terms of our cash balances, as of December 31, 2015, we had $336.9 million in cash, cash equivalents, investments, receivables and restricted cash compared to $346.8 million a year ago at the end of 2014. Our investments consist primarily of two to three-year investment grade corporate debt.

In connection with the cost sharing arrangement with AstraZeneca, FibroGen's total funding obligations for roxadustat outside of China was limited to $116.5 million. We fully met this obligation as of the fourth quarter of 2015, and as such, Astellas and AstraZeneca are now responsible for funding any further roxadustat development in CKD through launch for all territories outside of China.

Looking to 2016, we had stated in our last call that we anticipated total cash at yearend to be in the range of $295 million to $300 million. Our current approved budget projects to in excess of $300 million at the year's end.

I'll now turn the call back over to Tom.

We are now ready to start the question-and-answer session.

(Operator Instructions) And from RBC Capital Markets, we have Michael Yee on the line.

On roxadustat, on the China study, can you just describe how you will interpret that data, how important is that data importantly as a read through to the worldwide studies that are coming out in 2017? How should the Street and how will you interpret that data and look at that data? I guess it's just de-risking; how should we think about that?

And then on 3019, really quick, just on pancreatic. I know the study is ongoing. Can you talk about when you might go back to the FDA, talk with them about some of the data you've been seeing, pretty compelling, but talk a little bit about how you will take a next step there?

So Michael, with respect to China, it's important to note at the outset that the Chinese approval system works differently than in the US and that they give a provisional approval at the end of these trials and they require a follow-up study, which we have been advised would be approximately 2,000 patients data collection for about a year before you would have a final approval. And there is a five-year period of administrative exclusivity where this evaluation of roxadustat would go on. So in that context, you have studies that are similar to the ICH threshold type studies. They are not similar to what has been in the US or Europe in the past in this area.

With regard to the dialysis study, the comparator is in one case in some patients the occurrence of EPO, which is called ESPO, and that's actually probably a legitimate biosimilar (inaudible), and we are using that for our studies. Bear in mind, however, in China that all of the other ESAs are really knock-offs when Amgen was kicked out of that country in 1997. The government asked for efforts to make EPO and there were many variations in versions of EPO produced, and a few of them have become in common use. One of the restrictions on ESAs that's unusual in China is that there is typically a cap-on dosing, which is about two times the package insert. So, the patients typically maintained hemoglobin correction-wise at lower levels than you see in the West. For these reasons, the dialysis study will not be all that informative as it relates to the issues in play in the US or in Europe.

It's a somewhat different situation, and I think that obviously any data helps, but the size of this study is more similar to what we've done on Phase 2. So it's incremental, it's going to be informative, but I don't think it's a powerful indicator as to outcomes in the US. That's how I would frame it.

With respect to the non-dialysis study, the placebo time period is 8 weeks. And the reason for that is that China's conservatism just guides many, many principles on how they look at drug development, and they didn't think it was ethical or reasonable to keep people on placebo for a longer period of time. We don't know whether or not that's long enough to collect data that will be meaningful one way or the other. We did see some differences in our Phase 2 study that was also 8 weeks. So on that one, I'll say we're going to wait and see. The roll over in that study is onto roxa, and so we will obviously have some information on non-dialysis patients with exposures up to a year on roxa, up to a year on roxa.

I think that there is some limited value in some respects trying to read on to US studies that are designed against placebo or just straight correction studies. But in both cases, I would just say it's not a completely obvious connection between the outcomes in China and what's going to happen in the US. At the same time, there's another piece of information and it's going to be informative. And if there is any hickies on the data, it will matter. And so we have to just take one step at a time.

The collection of data thereafter, 2000 patient collection will be very meaningful, I believe, as we go on because of the timing here. So that's something that everyone has to pay attention to, presuming that we get to the point of being able to do the 2000 patient collection. So, that's about how I would look at the China situation now.

This assumes, of course, that we are executing timely, and so our execution timelines, which we think we can do is May completion of enrollment for dialysis, July for non-dialysis, and for the safety arm or the first 100 patients in either study given they are both 2-to-1 randomizations, the first 100 patient count for the safety assessment pool one year later. We hope we can get it done by the end of March this year. So, the earlier we have it finished, and that would be the last piece of what needs to be in the NDA filing.

Let me stop there on that question. Frank, could you take the 3019 question, as Michael has asked, I think it's a very interesting question.

It is an interesting question, we're pretty excited about the preliminary data that we have. And if you look the ASCO GI post, which I believe is available to everybody; we may be seeing two separate effects. If you look at just sheer tumor response using tumor markers like CA-19.9 and even PET scans, you are seeing suggestions that 3019 is increasing just the sheer activity of chemotherapy as being delivered with.

Additionally, these one patient, perhaps some others are suggesting we are seeing an anti-fibrotic effect, so maybe hitting a tumor in two ways, both attacking the tumor cells per se and also working on the fibrosis, obviously limited data set in fewer than a dozen patients at this point, but pretty exciting.

We started this trial of being cautious as we knew we had to get surgeons to work closely together to agree upon a criteria for being not resectable originally and then agreeing on standard criteria for when the patient can be resectable. So we originally just worked with three groups; Georgetown, Mayo Clinic and Jacksonville and, more importantly, our lead site in Seattle [with] Virginia Mason with Vince Picozzi.

We think we figured this out and we're rapidly trying to expand the trial to other centers so we can accelerate enrollment in this study and get it to complete enrollment before the end of the year. We've got data on the first eight patients. As I said before, we're pretty happy with that. We think if we can increase the number of patients threefold in the 24 to 30 range, we should have enough data if it continues the same way to talk to the FDA potentially before the end of the year depending on how the data rolls out.

That's assuming the data is similar what we're seeing so far?

Assuming the data - as far as the data rolls out. But three times we've got now and that will be enough to trigger us going to talk to the FDA, and we are busily thinking to now end points for what might be a pivotal trial based on this kind of trial design. It's far too early for us to really share those thoughts.

From Goldman Sachs, we have Terence Flynn on the line.

I was just wondering if it's fair to assume that enrollment of your partner's trials of roxa is progressing at least as well as your trials? And then, at what point will you guys have a handle on the event rate in the two different patient populations in the US, European phase 3 program for roxa?

I'm not exactly sure how much has been disclosed by our partners with respect to their studies beyond what's in trials.gov. And I would refer you to that for the common elements of knowledge that we have. I would say, given that I'm not supposed to talk about their studies, I would say a couple of them are enrolling quite briskly and maybe similar to ours, a couple of them are less so.

The effort to have a formal optimization evaluation, and remember these are event driven studies, so you are looking at 615 events in the dialysis and then 480 in the non-dialysis. So, 615 in dialysis and 480 in non-dialysis. We have to take the pool of data that's been assembled to-date and essentially go through an adjudication effort to sort out what events would count, and then have each of the companies that are involved assess what they think they need in terms of ongoing exposure patient time, patient month on exposure, to get to the point that we can get to the intended statistical model that has been agreed upon with the FDA.

Much of the clarification we seek with respect to how long the study will be I think will come out in the optimization process. And I think each of the companies is taking quite seriously in terms of preparing for this. So I expect, if I had to guess, I would say Q3, it looks like we will is probably start having some general framework and basic conclusions emerging about the optimization equations that are needed. And I think everybody is very serious about it, see a lot of potential. So, we're expecting very rigorous effort at this.

Terence, I think that's about all I can say right now. Is there any other aspect you for to follow up on this?

From Leerink Partners, we have Seamus Fernandez online.

This is actually Rich Goss calling in for Seamus. Just wondering if you could provide a few more details on the timing of the Phase 3 data? You mentioned that you should have data in hand for the China trials in late 2016. Do you expect also to report top-line data press release before the end of the year?

With respect to China, what we said is that we will get to the point of having data assuming May full enrollment for dialysis and July full enrollment for non-dialysis by near the end of the year as in perhaps November, in our thinking. This study is conducted entirely under Chinese regulation. It's not a Western study where the first approval in the US, it's not a global study; it's a special carve out about in Chinese regulation.

This is the Chinese bio-venture Class 1.1 study, and I think the simple way to apprehend what we are facing is that there are no precedence for what we are doing. There has never been a first in class medicine in China under the Class 1.1 rules that we are aware of. And so, we are preparing a petition effect to talk to our regulators at the right time that defines the ground rules about what we're allowed to disclose and when. We don't know what to expect in this regard because there is no precedence; it's one step at a time. So we know that if we hit these deadlines, the CMC portion of the NDA will kick in this year and the drug finally move early next year. So we'll get to the data fast enough anyway, but we'd like to see it could be this year if it is permitted, but that's the thing we don't know right now.

Just thinking about the ex-China Phase 3 data, should we expect to see individual top-line releases for each of the trials as they complete, or are you are planning to wait until they are all finished and just present the pool data?

The rules of the game that we were instructed by FDA was that both on non-dialysis and dialysis had to be submitted at the same time, and we've recently heard allegedly some other rules, so let me start with, and this is from the marketplace. And so, let me start with, we need to reconfirm what the ground rules are. Second, each company involved has a different set of publication policies that they apply. So, there is a harmonization issue that we have to get through.

Third, we have agreed that only after the optimization round one meetings where we go through the optimization issues and come to some tentative conclusions will we address the question of whether or not the studies are reported as completed singly, or the studies are aggregated by dialysis and non-dialysis and reported when the entire regulatory qualifying studies is known, or whether or not they are going to get reported at the same time.

We have to observe carefully and rigorously what our partners would like here. Obviously, we are one of three partners and we can't be campaigning for our way in any way they perform although obviously the faster that the data gets out there we think the better for us and for our investors. And so, we will be guided by the rules of interaction with our partners, but at the same time, we will be leaning and encouraging earlier disclosure rather than later just for a number of reasons that I think you probably are better equipped to argue than I could.

From Credit Suisse, we have Kennen MacKay online.

Tom, you mentioned changing geographic enrollment goals a little bit for the trials of roxadustat; could you maybe talk a little bit as to where that came from, did that come from faster enrollment in some geographies than in others or not enough enrollment in some versus others?

That is a fair question. So, the basic message I try to convey as we have three studies that we have target enrollments for that were agreed originally with the AZ senior management group in January 2015 and then became part of the overall goals by the three companies. And we finished one basically in half the time allocated, so that's best news. The second one is getting finished sometime maybe today, maybe tomorrow; it's very close now.

The third one is the one I address these comments to. The third study is a global study; there's five different territories that we are contracted and managed separately. And there was a judgment made in the fourth quarter last year that, because of the time at which the various contracts were initiated, that a couple of sectors were lagging behind the others simply because they hadn't enough month on study. And so, the decision was made that it was important to get data from those sectors.

And as such, of the five we deemphasized enrollments. We still have patients, a lot of patients on steady, but we deemphasized enrollments in Eastern Europe and in the Asia-Pacific arena, and the focus is much more on Latin America and on the US. And so, this is not something unusual or bad news or trouble or anything like that; it was just simply that because of the way the contracting was done, the US and Latin America were initiated later in terms of the study activities than the other regions.

And we want to have the patient accruals in the US, Latin America catch up. And so because this change does not involve any impact on the overall project timelines, it's well within the range that our partners are looking at for the other studies. We decided to shift emphasis at the end of the year to US, Latin America and less emphasis on Eastern Europe or Asia-Pacific.

When I say less emphasis, I mean that there are a couple of patients coming onto screen, if there's patients on screen, we took them, we didn't stop. But we didn't seek to do more of that, for instance, in Eastern Europe, and instead, the focus is more on the US, Latin America. Does that explain clearly enough for you?

And maybe just one question for Frank, on 3019 in pancreatic. So, I think that data from ASCO GI was pretty astounding, and just wanted to ask you a little bit about regulatory precedent in this setting if we've ever seen something based on surgical resection here, or if we should be thinking more about - you mentioned two modalities; one fibrotic modality, which relates to [detection] of a tumor. And then other synergizing with chemo and what (inaudible) we should be, maybe thinking about more as we are thinking about a registrational trial design end points there?

I don't have a definitive answer for you. There certainly have been many trials run using chemotherapy preoperatively, particularly in the GI area in head and neck regions, so that's a well trodden path, but for product approval, that's not been routinely done. You're probably aware of the FDA's increasing interest in new regimen chemotherapy in breast cancer, but that's still an area that is difficult to fully understand and not quite applicable.

We are trotting some new ground here, but we are in some ways I will call cocktail party end-points, shifting somebody from the incurable state to a curable state, potentially a curable state; something that is easy to understand end-point. So then we can make a good case to the FDA that just simply moving somebody from the incurable unresectable category to resectable potentially curable is a very impressive end-point.

In parallel, obviously what we are seeing is pretty good tumor response and evidence that we may be increasing the tumor response in chemotherapy alone. And if the FDA insists that we do a survival trial, which would be the worse case scenario in that setting, I don't think that would be a particular problem for us and would not be materially different than any other pancreatic cancer trial that you're familiar with. So, we can see the downside as something that's not understandably manageable, and the upside is quite good for us.

Let me add onto that, just a little bit; we've been asked many times aren't there other studies like this and various examples are brought up. And when we dug in and looked at the answer, it turns out to be no. So just to be clear, we are taking patients that are fully worked up for a decision about surgery. And at the end of the process, the determination is made that they do not meet the criteria for surgeries.

So, the patients are uniformed pool in a sense; they have locally advanced pancreatic cancer, they are being studied for whether or not they can be in a surgery pool, and the decisions are negative. And it's that pool only that we're randomizing from, and because of this set of rules, if the scoring can be uniform through the study and we can facilitate that with the study design, the conclusions about this study are quite dramatic, and that's, I think, the key to looking at what FDA's likely behavior is, because I think that this is clinical benefit on the order - I have readily heard of or seen to go from 1% or 2% survival in five years for patients that fail scoring locally against pancreatic cancer.

They are frequently dead within few months and so on. Two, pools are zero without lymph node involvement, it looks like 34% in five years with lymph node involvement, about 31%, [PEN-R 1] 20%, 22% with lymph node and 20%. So, these numbers are really significantly more than what the alternative is. And so, I think just on the merit of the clinical benefit, you have to think through what FDA has done in the past in situations where there aren't pre-existing common clinical trials pathways that people have already worked out.

And there I think there's some potential for action. We won't know, though, until we go see them. And we want to have enough data that they don't kick us back on the basis that there is not enough data yet. And so, that's really where we are. If you or anyone else on the call knows of an example analogous to what we are doing, we'd love to hear about it because that's really quite informative if we can figure out what that example would be.

I don't have an example for you. But just one quick follow-up on that; Frank, you mentioned overall survival being a potential worse-case scenario, but, Tom, you highlighted the dramatic difference in survival between patients who are able to be resected and those who aren't. In breast cancer, you obviously use disease-free survival as sort of a surrogate for survival, which is pretty well accepted by the FDA. Do you think you can do something similar in pancreatic cancer coming out of the neoadjuvant almost setting (inaudible)?

What I am trying to get across is that it's been so bleak in pancreatic cancer, there has been so little progress, that just the prospect of progress by itself is a different set of polarizations in your sunglasses than you normally have.

And with that, Frank, you go ahead and answer the question.

I don't want to speculate too much on such small data set. In many ways, all options are available, progression-free survival and overall survival are always endpoints you're interested in. I would point out at the ASCO GI Conference of the four patients randomized to chemotherapy alone, two actually had disease progression before the end of six months of dosing. It's not terribly surprising in this disease, and obviously all four of the patients getting combination therapy got to the end of the treatment, except for the one who dropped out due to gemcitabine toxicity.

I think we are seeing big enough improvements in tumor response at this point. But we may be able to work with that as a progression free survival or overall survival if we go there. At this point, my approach at this point is to look at all possible ways to getting the drug approved, have more data and then once we got the data we can go is only the best option to the FDA. As I said, if we can get to 3 times number of patients we got now and that data continue like this, we will be talking to the FDA at that point.

From Stifel, we have Tom Shrader online.

(inaudible) for Tom Shrader in Stifel. I have a question about the DMD program; what will trigger the extension of this study from non-ambulatory to ambulatory patients? Are you looking for some signals from the non-ambulatory trial?

Not particularly. We think that we can learn a lot from the non-ambulatory setting just because in these patients once they start to have a decline in capacity, which they all will, you can project their future pretty well and we think we can bend that curve and stabilize and improve their capacity. That's going to take a while. We are going to get a lot of safety data and a lot of just how do you do you profitably in this new population.

I think with that on board, we are waiting for efficacy. We really need to talk to the FDA. At this point, we don't know whether boys who are non-ambulatory just to advance, to respond to our drug or not. So we're not really using efficacy data in the non-ambulatory boys to gate, or are looking at ambulatory boys; rather just simply getting safety data, getting experience, and really picking out the details of the trial so we can talk to the FDA.

I would like to underscore this. We're probably going to do the ambulatory children ages 3 to 11 if FDA lets us almost under any circumstance because it's a little bit different treatment population and different issues there. And we want to get as much data as possible. If we're going to have any impact on progression, the ambulatory cohort is the one that could happen.

And so, it's a really interesting arena. I wouldn't you it as non-ambulatory has to be successful as a contingency for the ambulatory to happen. We are not looking at it that way at all. We just need to understand what FDA is concerned about because we never had any occasion to treat anyone between the ages of 2 and 12 with our antibody. And so, that's where it is right now.

And I have a quick follow-up on that. So, you mentioned interim look at the data. Will you communicate it to the public?

The primary endpoint of this trial is at one year of dosing, and for practical reasons we thought we should continue running the trial to get more efficacy data. So actually, I called an interim analysis in my formal presentation, when in reality it would be a report of our primary endpoints in this study.

From Citi, we have Joel Beatty online.

Just a question on the fibrosis program in pancreatic cancer. With open-label study design, what are your plans for the timing of the release of additional data?

That's always a hard question. We don't want to trickle the data out one patient at a time, I think that would be inappropriate. So I think we are going to want to wait until we've got a substantial amount of more data, I said obviously we are looking for three times of as many patients. So, we have to have a meaningful increment in data before we want to report and again, hopefully that would be by the end of the year.

The decision to discuss the pancreatic area was probably mine, and I felt that anything that has the potential to affect decisions (inaudible) security is something that you guys want to know about as fast as we can get to you. So, there was a threshold of saying, gee, this is actually interesting enough that it may have impact.

By the same token, I don't want to waste your all's time by every call reporting one more patient or two more patients. So, we will try to pick a point further down the road where there is a marginal increase in the information in a way which either reinforces the conclusions that are there now, which are material, or changes of material disclosure in some way, so to affect how you would be thinking about the value of this asset.

And so, obviously, that's an arena that is a little bit murky, but we are going to tilt it in the direction of disclosure. So it's not going to be viewed, it's just rather just we need to have an update incrementally to say something new and important beyond what we have already said. And so, that's certainly the standard that I think we should be applying here. And part of the reason to do this is this is a different paradigm and as much as the PIs and their (inaudible) an institutional review boards and their seniors who have to approve these studies and so on needs to understand the paradigm and give feedback. We will also learn a lot from many of the people that are either investors (inaudible) or are analysts on this account.

We disclose in part because of the interactions that we can gain as people are aware of what's going on and bring other ideas to the table. So this is all very interesting cutting-edge stuff, but it's also a place where, without the parallels to other programs, without obvious analogies, there's a number of questions that need to be answered and answered well. And so, what we look for is much help as we get as we think through how to do this.

And we have no further questions at this time. I will now turn it back to Tom for closing remarks.

Thank you. So, thank you to everyone on the line today for participating in the call on FibroGen. I hope our presentation was clear enough. Please do not hesitate to e-mail or call in and ask questions. We look forward to speaking with you again soon and providing future updates. Have a good afternoon.

Ladies and gentlemen, this concludes today's conference.